2024 auto market expected to welcome sales' big year '

In 2023, in the context of the continuous transformation of new and old potential energy, the domestic car market has experienced an extraordinary year. The new car market sales reached a record high, the second-hand car trading volume stabilized and recovered, and the automobile export turned over a bright "report card", and the automobile market responded to the doubts of all parties with actual performance.

Looking forward to the car market in 2024, from the overall car market operation to the consumer market demand, it will change as the pace of transformation and development of the car market continues to accelerate. At this key node, it is of great significance for the development of automobile consumption market to predict the trend and future development trend of automobile market in the next year.

It is expected that the car market will stabilize and rise next year

Since the auto market entered the adjustment cycle in 2018, whether annual auto sales can achieve positive growth is the focus of concern in the industry. The stable new car market is an important basis for the sustainable and healthy development of the overall car market.

China Association of Automobile Manufacturers data show that from January to November this year, the domestic car market sales increased by more than 10%, significantly exceeding market expectations, and annual sales are expected to break the 30 million mark.

For a long time, China's annual car sales have been hovering in the range of 25 million to 29 million. Therefore, there is always a voice in the industry: the development bottleneck of the domestic new car market is about 27 million. Under the new development stage, what direction will the car market develop next year?

In this regard, Cui Dongshu, secretary general of the National Passenger Car Market Information Association, said in an interview with the reporter of China Consumer News that considering the consumer market demand and the current environment of the car market, it is expected that the car market will continue to achieve positive growth next year. Among them, as an important part of the new car market, the total retail sales of passenger vehicles in 2024 is expected to reach 22.2 million units, an increase of 3% from this year.

Chen Liran, director of forecasting research at the China Automotive Strategic Development Research Center at Tianjin University, shared the same view. She told China Consumer News that China's auto market will maintain a stable growth trend in 2024, and new car sales are expected to grow at about 10% year-on-year. Specifically, the growth rate of the domestic market for fuel vehicles has continued to decline, and the export market for fuel vehicles has steadily increased.

According to the sales of 30 million cars this year, if the sales of new cars to achieve 10% growth, this means that next year's car sales will be expected to reach 33 million units, a new stage of development.

In recent years, with the significant improvement of the comprehensive strength of products and the more mature infrastructure construction, the market position of new energy vehicles based on pure electric models has been rapidly improved. Up to now, the penetration rate of the new energy vehicle market has reached 33% in one month, and it still maintains a rapid growth rate. It can be predicted that the future new car market to complete the promotion goal will largely rely on the strong performance of the new energy vehicle market. The industry generally believes that the annual sales of new energy vehicles next year will undoubtedly break through the 10 million mark, and the market penetration rate will reach more than 40%.

Chen Liran predicted that the overall new energy vehicle market will maintain rapid growth next year, the sales of new energy passenger vehicles will still grow at a high speed, the market share of new energy commercial vehicles will further increase, and the growth rate of overseas exports of new energy vehicles will slow down. "What is different from the past is that with the rapid development of hybrid technology, hybrid vehicles and pure electric vehicles are expected to account for 50% of the share, instead of pure electric models dominate the situation."

However, in the view of Wang Xuechao, deputy director of the political research Consulting Center of China Automotive Research (20.480, -0.32, -1.54%), in the medium and long term, new energy vehicles are still dominated by pure electric products, and it is expected that the sales of new energy vehicles will exceed 10 million next year. In the short and medium term, there is also a certain market for plug-in models, and it is expected that the proportion of pure electric and extended-range markets in the new energy vehicle market will be 65:35 next year.

Multi-brand strategic cooperation is the direction

With the rapid development of intelligent network technology, the independent brands that have taken the lead in intelligent electric vehicles have their relative leading technical strength, making the leading advantages accumulated by foreign brands in the era of traditional fuel vehicles significantly weakened. Data show that the market share of independent brands has risen to more than 59% in November. There are signs that the rising market share of independent brands is likely to climb to more than 60% next year.

It is not difficult to see that the current joint venture brand faces difficulties. According to the analysis, there are many reasons for the lagging development of new energy vehicles under the main joint venture brand, such as excessive investment in research and development of traditional fuel models, resulting in insufficient research and development of new energy vehicles or lagging strategic layout. Obviously, such a development situation can no longer meet the current consumer market demand for cars.

Xu Haidong, deputy chief engineer of China Automobile Association, told China Consumer News that because automobile companies have significantly increased their research and development investment in the field of electrification, competition in the new energy vehicle market will undoubtedly be more intense next year.

The reporter noted that since last year, the joint venture car companies under the pressure of reality, have to electrification direction as the focus of development, a number of joint venture new energy vehicles concentrated into the consumer market, trying to fill the gap in the product lineup at the same time, to win the recognition of the consumer market. However, after the layout of the new energy field, the market share of the joint venture brand not only did not recover as expected, but also accelerated the pace of decline, among which Dongfeng Infiniti and GAC Mitsubishi and other car companies were forced to withdraw from the market due to poor market performance.

Facing the pressure of market competition, the joint venture car companies have reached the node where they must adjust the brand development strategy. Objectively speaking, after years of precipitation, the joint venture brand still has comprehensive advantages in the overall market size, brand value and other aspects, and the joint venture brand is not without opportunities in the context of transformation and development.

The reporter noted that some joint venture brands are complying with the development trend by improving the research and development of electrification technology. In addition, the choice and independent brands to strengthen cooperation in the field of technology, product research and development gradually replaced the traditional foreign brand one-way input mode.

S&p Global Auto China deputy director of sales Tao Gao publicly said at the 2024 China Auto market overall forecast Forum held recently that the auto market is expected to show a low development trend next year. From this stage to 2030, the market share of independent brands will continue to grow. In the long run, multi-brand strategic cooperation is the main direction of the future development of car companies, and its role in promoting sales growth will become more and more obvious.

The director of the strategic development Research Center of the strategic planning and science and technology development Department of an independent brand told the reporter of China Consumer News that by 2030, the market share of new energy vehicles is expected to reach about 60%, and car companies will output technical standards and brands while exporting products, which is an opportunity for the future development of independent brands.

Avoiding a price war is key

If you use one word to describe the car market this year, it is not "volume". Although the car market next year has not yet opened, the increasingly fierce competition in the car market will be an inevitable result.

Cui Dongshu analysis said that with the rapid development of the "new four modernizations" technology, the homogenization of the models of major car companies is becoming more and more serious, the technical level of different models tends to be consistent, leading to consumers difficult to make choices, coupled with the consumer market demand is continuing to pick up in the process, so the competition in the car market next year is not destined to be easy.

In fact, the fierce competition in the automobile market indicates that the development of the domestic automobile market is in an unhealthy state. Among them, the auto dealer inventory warning index of all months this year is higher than the warning line, indicating that there is still a large room for improvement in consumer market demand.

In order to attract the attention of the consumer market, since the beginning of this year, a large number of car companies, especially new energy vehicle companies, have started a continuous price war. Different from the previous industry price reduction behavior, the price war covers a wide range, the price reduction range is large, and the market and industry have a far-reaching impact.

China Automobile Association deputy Secretary General Ye Shengji told China Consumer News reporter: "Limited by the pressure of new car sales, car companies are forced to choose the road of price war is not conducive to their own development will also hurt the overall car market environment." I think an important prerequisite for the development of the car market next year is to try to avoid a price war."

Next year, the competition of various car companies in products, technology, marketing, services and other aspects will also intensify, and the leading advantage of the leading enterprises will be further increased. The auto price war will continue and even become more intense.

It is worth mentioning that in addition to car companies through the way of price reduction, various strategies are also being adopted to actively promote the development of the automobile market. In July, the Ministry of Finance, the General Administration of Market Supervision and other departments issued the "Several Measures to promote Automobile Consumption" to optimize the management policy of automobile purchase restriction. Encourage restricted areas to issue annual car purchase indicators as soon as possible, implement differentiated policies for urban and suburban indicators, and increase annual car purchase indicators according to local conditions. On December 19, the Development and Reform Commission of Zhejiang Province issued the "Several Policies on Further Promoting High-quality Economic Development (Draft for Comments)", which clearly proposed in the "36th Article to improve traditional consumption" to promote the orderly cancellation of minibus restrictions and other policies. This means that after the restriction of vehicle licenses began in 2014, Hangzhou will be expected to cancel the restriction of small buses and other policies. Next, whether cities with car purchase restrictions, including Beijing, Guangzhou, Shanghai and Tianjin, will adopt the same policy has aroused widespread concern in the consumer market.

Xu Haidong said that it is expected that the total sales of automobiles in China in 2024 will be about 31 million, of which the sales of new energy vehicles will be about 11.5 million. With the gradual recovery of China's economy, consumer market demand will continue to maintain steady growth, and China's automobiles will officially enter a new stage of 30 million vehicles next year.